Consultant says credit curbs delaying projects

Published: Thursday, January 14, 2010

WALT NETT

Credit restrictions among community banks are keeping commercial development projects from getting off the ground, a Houston-based real estate appraiser and consultant told area home builders Wednesday.

The issue, Teel said, seems to reflect a conflict between national policymakers and the industry's government regulators.

Treasury Secretary Timothy Geithner and Federal Deposit Insurance Corp. Chairman Sheila Bair have said they want community banks to increase lending as a way to stimulate the economy, while regulators are increasing capital ratios, which prevents banks from making loans, especially in mortgages for commercial ventures.

Teel was in Lubbock on Wednesday to give the West Texas Home Builders Association a preview of the annual Blosser Report, which examines the market's office, retail and apartment markets.

The report was started some 20 years ago by Lubbock appraiser Merle Blosser, who died in 2007.

The 2009 market report is expected to be released Jan. 25, said Mike Divin, who oversees the Blosser office in Lubbock.

One change in the report is that instead of looking at Lubbock as a single market, the report will split the city into six geographical categories, allowing for comparisons of market areas.

Citywide results reflected slower times in the retail and office markets. About 15 percent of the city's office space outside the central business district is vacant, along with nearly 15 percent of the city's retail square footage.

And the solution, at least to sopping up the excess office space, is jobs, Teel said.

"Someone's got to have a job, and a desk," he said. "Without jobs, you cannot start the recovery."

After the meeting, Divin spoke briefly about bright spots in the market, including job development efforts, such as Monsanto's new research facility in Lubbock Business Park, along with enrollment growth at Texas Tech.

While Monsanto isn't expected to bring a lot of jobs locally, the jobs it will bring will pay well, Divin said.

At the same time, he added, growing enrollment at Tech should increase retail demand.